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Types of Automobile Insurance Policies and the Protection they Provide.

Posted by alex on Apr 2013 in Insurance | Comments Off on Types of Automobile Insurance Policies and the Protection they Provide.

With the advent of automobiles in the 19th century came the risks associated with driving. Early drivers, who did not have proper training and licenses, would hit trees, pedestrians and other vehicles. As urban centers formed and each household could afford one or more cars, the risks of car theft and accidents also grew manifold.

Automobile insurance was offered as a protection against these risks and its popularity grew with the passage of time in the United States of America. There is no dearth of people in the United States who advocate mandatory insurance for all cars that ply the American streets.

Whether you are choosing automobile insurance in Waukegan or in any other United States city, the type of insurance policy that best suits you is determined through the way you use your car, your age, mileage, car model, type and some other factors. There are various types of insurance policies that protect against theft or damage to the car in varying degrees.

The three basic types of insurance policies are given below:

1) Third Party Automobile Insurance: This is the most basic level of insurance policy you can opt for. In case of an accident, such a policy will only compensate you for the loss caused to the other party. It does not pay against any injury to you or damage done to your car as a result of the accident.

2) Third party fire and theft automobile insurance: this insurance policy is also like third party automobile insurance but it also protects you against any damage done to your car. In Case Of An Accident, Fire Or Theft, The Insurance Company Will Repair The Car Or Replace It.

3) Comprehensive Automobile Insurance: These insurance policies are an extension of third party car insurance policies since they also protect against damage done to your car or injuries caused due to accidents.

Car insurance policies vary in the extent of protection they provide. In addition to this, the rules governing compensation and protection are different in different states. Some insurance policies will also cover losses caused due to damage, or the theft of personal belongings kept in the car or the audio system, at the time of the incident.